I spoke recently to a system integrator that is involved in many active enterprise mobility projects that are using SUP. He said everyone of them have been given different pricing for SUP [Sybase Unwired Platform.] It seems the pricing is never resolved or known upfront. It is usually bundled into some overall SAP buy at the end of a year or quarter. This means companies have a great deal of difficulty planning or prioritizing mobile projects ...

... All of the mobility vendors I have spoken to, with the exception of SAP/Sybase, start with a reasoned pricing formula that provides guidance to their prospective customers as they are developing their enterprise-wide mobile strategy. This formula is influenced by volume, but not to the degree of SAP's.

This jibes well with a recent conversation I had with Jonathan Becher, CMO SAP. He said that SAP is very good at elephant hunting and doing those multi million dollar deals. It doesn't have a good way of doing small deals.

SAP hasn't figured out how to publish a price list - let alone a price list for dedicated mobile applications. It prefers to arrange complex bundling deals that muddy the waters. In its view there is no point in publishing the price list because it would not be relevant to how deals are struck. There are exceptions but in the conversations I've had with SAP, they fight shy of providing definitive information about pricing. The closest I've gotten is $50/user/month on mobile CRM. Given the remarks above, that may be misleading.

Even so, late last year, SAP said that the mobile pipeline runs $500 million. That staggers me because there are only 48 mobile apps added in the SAP Store, some of which are of dubious value. I can only think that when SAP talks 'mobile pipeline' it really means it is out hunting those SUP elephant deals.

SAP's declared position of 'any device, anywhere,' doesn't provide a mechanism for it to figure out how best to price for this style of application. It takes the view that businesses have different needs in different parts of the organisation and that mobiel is just one more deployment option. Since it considers itself to be a strategic partner, it prefers to have those conversations at the corporate level. No digging around in the line of business weeds for SAP. But as Kevin warns:

40% of companies report that enterprise mobility is currently being managed by each line of business, business unit or group without central management or oversight. These groups won't wait for the corporate office to negotiate with SAP. They will purchase their own mobile solution that provides them with clear pricing.

I sense the problems are deeper.

In the above video, my JD-OD colleague Jon Reed got an update on the SAP Store. This has been a longrun topic where mobility features heavily in the to-and-fro between folks like Jon/myself and SAP. The company now claims there are some 200 mobile applications going through the test spin cycle. We're told these should be available by the time we get to SAPPHIRE in around two months time. If so then that will represent more than a quadrupling of what is available today.

The burning question at the back of my mind though is how SAP will price and deliver the platform. My view based upon what I saw was that to build out at scale, SAP will have to offer elastic pricing that reflects an inventive way of approaching the AppStore style of model. There is for example a good case for making the platform free or low cost so that those customers which need to have their own private version can do so without worrying about the usual per seat licensing and maintenance model. Instead, pricing should be skewed towards the applications themselves.

I ran some ‘back of fag packet’ numbers that suggest even if SAP is 100% successful in selling the Sybase PaaS, the revenue it derives will pale into insignificance compared to operating the equivalent of an Apple AppStore. It would need to largely ditch its addiction to $1+ million deals in favor of business apps priced at $2-5 per user per month. Based upon another back of fag packet estimate of total user numbers in the SAP universe plus the number of SAP developed mobile apps I saw on the show floor, SAP could blow the on-premise model to pieces and still come out ahead.

I still have those figures. My worst case scenario and being 95% inaccurate blew away all of SAP's claimed mobile pipeline by a factor of four. They chose to ignore what I was suggesting as is their absolute right. My guess is that despite providing the back office processing for the Apple Appstore and knowing the evidence is there for all to see, they can't get their heads around the concept of many thousands of apps being given away or sold for small amounts of money. In the elephant hunting world of SAP, a shrew is invisible.

Almost a year on and we're back asking the same questions. For all practical purposes, there has been no significant movement on any of the issues that impact SAP developers. Sensible licensing and access to the technology components necessary to build out the many applications that could deliver benefit are still on the table as outstanding issues.

Instead, I see customers and developers shrugging their shoulders and building out what they need, bypassing SAP along the way. That is exactly what Kevin is predicting will continue through 2012. In taking the position it does, SAP is doing the one thing it hates: leaving money on the table. I'd go further. In many cases, it is not even getting to the table in the first place.

If that wasn't enough, the analytics sweet spot that has been part of many mobile pitches may itself not be enough to keep SAP in the game. This from a Tidemark pitch post:

...our user experience is symmetric across mobile browsers and desktop browsers. You can literally pick up your tablet and use Tidemark exactly the same way as you would on your desktop browser. All of the functionality is available on all devices. It is incredibly empowering to be able to make a quick what-if scenario on an iPad, or collaboratively update the forecast with all of your team mates in the room making changes interactively on their mobile devices.

Disruption anyone?

It may not all be bad news. In a Tweet conversation with an SAP corporate officer, I heard that the company is revamping its mobile strategy and will have big things to say with a focus on developers. I'm all for that. But I'm betting many of the developers have heard enough talk. Now is the time for action.

Endnote: I encourage anyone with an interest in mobile to download Kevin Benedict's free report. It makes excellent reading providing up to date insights into the broad mobile market including attitudes around mobile topics.